FIR filed against Bank Chairman and Manager in Rs 83 crore fraud, RBI said Loans were given to fake customers

One of the most significant scams in the history of urban cooperative banks in Bihar has come to light, involving the manager, CEO, and chairman of The Vaishali Shahri Vikas Cooperative Bank at Hajipur. Allegedly, they embezzled approximately Rs 83.5 crore through fraudulent loans disbursed to 383 fake beneficiaries between April 2020 and December 2022.
Modus Operandi
The fraud is not only a financial crime but also a case of data theft. Most of the loans were distributed by manipulating Aadhaar numbers and using fake PAN, LIC bonds, and warehousing payment receipts.
Detection and Inspection
The Reserve Bank of India (RBI) initiated an inspection in November 2023, deploying a forensic team to verify loan forms. The inspection revealed that the embezzlement occurred in the names of 383 fake loan beneficiaries under the categories of cash credit limit and demand loan.
Responses and Denials
Notices have been served to the involved parties, with 130 out of the 383 alleged beneficiaries denying any association with the bank transactions. Surprisingly, despite the severity of the charges, no arrests have been made yet.
Ongoing Investigation
The Town police station in Hajipur (Case No: 933/23) is handling the case. The Station House Officer (SHO) Asmit Kumar, when contacted, mentioned that the investigation is ongoing.
Sources suggest that such a substantial scam would likely involve the collusion of influential individuals, raising questions about the depth of the conspiracy.
Loan Disbursements
Loans ranging from Rs 10 lakh to Rs 45 lakh were fraudulently disbursed to each fake beneficiary, totaling the staggering amount of Rs 83.5 crore.
The bank’s financial structure comprised a paid capital of Rs 9.5 crore, reserved capital of Rs 3.5 crore, and deposits amounting to Rs 99 crore.
Transactions and Audit Findings
An audit by the RBI found that CEO Vipin Tiwari’s bank accounts witnessed transactions totaling Rs 29 crore between December 2021 and December 2022. The forensic audit is ongoing to trace the misappropriated funds.
FIR and Recovery Case
General manager Mohd Shahbaz Alam filed a First Information Report (FIR) against the suspended manager, CEO, and chairman. Additionally, a recovery case has been initiated against them with the registrar of cooperative societies.
RBI DICGC Intervention
The Deposit Insurance and Credit Guarantee Corporation (DICGC) of RBI has paid Rs 56 crore to nearly 5,500 customers/depositors under the insurance scheme, aiming to revive the bank. The forensic audit is crucial for tracking the money trail.
Where was the STATUTORY AUDITOR?
HAS NOT HE POINTED THE MISDEEDS?
What’s the size of the Bank? DEP +ADV+BRANCHES+ STAFF.